Unexpected Benefit: Use Chapter 13 to Permanently Stop Income Tax Collection

Wasson and ThornhillIncome Taxes

Bankruptcy can help you permanently stop income tax collection. That’s true even with more recent taxes that cannot be written off.   The Automatic Staying, and the Discharge, of Income Tax Debts Sometimes people are surprised to learn that filing bankruptcy gives you power over income taxes. It does so in two big ways. First, filing bankruptcy stops the IRS … Read More

Unexpected Benefit: Use Chapter 13 to Stop Collection of Support Arrearage

Wasson and ThornhillChild & Spousal Support

Neither Chapter 7 nor Chapter 13 stops ongoing child/spousal support payments. But Chapter 13 CAN stop collection of support arrearage.    Most Debts Filing bankruptcy stops—or “stays”—the collection of most debts. (See Section 362(a) of the U.S.  Bankruptcy Code about the “Automatic Stay.”) Then at the end of the bankruptcy case most debts are discharged—legally written off. (Sections 727 and 1328 of the Bankruptcy Code.) At that point … Read More

Unexpected Benefit: Use Chapter 13 to Escape a Tax Payment Plan

Wasson and ThornhillIncome Taxes

Chapter 7 can sometimes help you deal with unaffordable income tax payment plan. But Chapter 13 is often a better way to escape a tax mess.   Tax Agreement Payments Too High We laid out the problem last week. You’d entered into a monthly payment plan with the IRS or your state because you couldn’t pay what you owed. But … Read More

Unexpected Benefit: Use Chapter 7 to Escape a Tax Payment Plan

Wasson and ThornhillIncome Taxes

Breaking an IRS/state income tax payment plan usually has very bad consequences. But filing bankruptcy lets you escape a tax payment plan.        Tax Installment Agreement You Can’t Afford It’s a common problem. You owed income taxes a year or two ago when you sent in your tax returns. Money was very tight so you couldn’t just pay it … Read More